Project Management, Effective Capacity - Essay Example

PROJECT MANAGEMENT By: Part one A) Designed capa Capa is the number of units that a facility can hold, store, receive or produce in stipulated time period. In this regard, design capacity is then defined as the theoretical maximum output of a system in a given period under ideal conditions. Design capacity is also known as design rate. It is normal that the design capacity differs from the actual one. Building a market takes time, sales are increasing and production is lower than the design capacity calls for and the facility is therefore underutilized. There is a great time lag between the conception of a facility and the actual construction and startup. Operating at designed capacity can cause rapid wear and breakdowns. Generally, operating at design capacity basically means operating at the organization’s productive limits. The designed capacity is 20,000 kg. Effective capacity Effective capacity of a facility is important in determining the extent to which a facility can produce. It is therefore defined as the ratio between design capacity and the expected capacity of the intended facility.It is worth noting effective capacity is affected by a firm’s production schedule, production mix, maintenance standards and age of equipment’s. The formula for effective capacity is given by: Effective capacity=expected capacity/design capacity. Effective=16000/20000=0.8=80% The effective capacity=16000 Actual output A production facility can produce a certain amount of product at a given time period. The actual amount of product that can be produced by a production facility at given time period is called actual output. This is different from amount that the facility could produce if it were to run at full theoretical capacity. Specifically, the actual output is given by: 60/100X20000=12000 kg Utilization Utilization is the percent of design capacity. It is given by actual output/design capacity =12000/20000=60% Efficiency Effective capacity is the actual output as a percent of effective capacity. It is given by the formula: actual output/effective capacity =12000/16000=75% B) Capacity of a system is its ability to produce goods or enhance the delivering of services over some time period. For a system to realize its full potential a proper capacity planning is inevitable. That is, the long term and short term plans to help the system achieve its full potential. Short term concerns relate to the variations in capacity requirements as a result of random, seasonal and irregular fluctuations in demand; while long term considerations relate to the overall level of capacity. There are several factors that affect a firm’s productive capacity. Some of these factors are within management’s control while others are not. Factors such as physical resources and utilization of labor are within the management’s control. Organization capacity also faces management challenges such as personal issues, technological maximization and output controls. A firm can profit significantly from efficient resources management. The actual output may be even less than the system capacity since it is affected by short-range factors such as actual demand. Therefore, managing actual output is important for effective production of a firm. As a project manager, I will advice the human resource manager to undertake the following strategies in managing the actual output and to cope with major changes in products and services. These options include; developing a new product line, expanding existing facilities and construction or phase out production plants. In some instance, the firm may be forced to use phase-in-strategy for introducing the next model of the same product or service to retain and/or improve its actual output. In general, the firm should be comfortable producing between 80 to 90% capacity utilization because of low fixed costs per unit and there is some scope to meet new orders or carry out maintenance and training. Efficiency should hold a more vital role as it can demonstrate if there is waste in the production process. Efficiency is how the resources are used in comparison with standard. For a human resource manager, efficiency management is important but he sometimes needs to know the expected output of a facility. This is the rated capacity which is given by: rated capacity=available time X utilization X efficiency. In this regard, the human resource manager must take these factors into consideration so as to ensure effective efficiency capacity: forecasts demand accurately, finding the optimum operating level, understanding the technology and capacity increments and building for change. The manager should recognize the broader effects decisions have on the entire organization. As mentioned above, utilization is the percent of design capacity. It is given by actual output/design capacity. Effective capacity and utilization are factors that must be considered before a facility or a project is initiated hence it is a fact to argue that human factors and process form the vital parts of effective capacity and utilization. For smooth effective management of resource utilization, process factors must operate efficiently and run smoothly otherwise the rate of output will melodramatically increase. Human resource involved in the production must undergo proper training and must be motivated that will ensure high labor turnover. As a project manager, I would advise the Human resource manager to implement the resource leveling technique to ensure effective capacity management and resource utilization. In general, resource leveling will help the human resource manager to invest in resource as stored capabilities, and then unleash the capacities as demanded. In addition, this will be an added advantage for smoothing the available resources hence dealing with issues of excess inventories and shortages amicably. PART TWO A project management plan is a well-documented strategies and policies of the entire project starting fromthe initiation through planning, execution and closure phases. As a major player in the UK dry cleaning industry, proper project management by Johnsons is vital. In this regard, the firm has to establish a proper project management strategy to help it relocate to the new site and hence expand its operational base by 50% and bid for new public sector contracts. Scope of the project Johnsons is a major player in the UK dry cleaning industry. The management had decided to move to a new site. The new site will allow the company to expand its operational base by 50% and bid for new public sector contracts. Currently at its site, the company has a capacity to deal with 20,000 kg of laundry. However, management prefers to work at 80% of its capacity. Never the less, the management has realized that the company is working at 60% capacity and this has resulted on the top management demanding for explanations from the Human resource manager. In return, the HR manager has opted to undertake a project to improve the capacity of the firm to at least 80% production capacity. The aim of the project is to integrate technology in the production process so as to limit waste and hence increase the production capacity. The transition from planning to implementation shall comprise of a detailed assessment to evaluate existing conditions as compared to planned improvements. The operations period of the project will be 6 months. The cost of the project is expected to be around $200000. Quality management In execution of the project objectives; planning, executing and managing of the project is integral. In this project, the area of interest in regards to project quality management comprises of the organizations processes that define the project’s quality policies, its objectives and the required responsibilities. The Human resource manager identifies three processes for quality management: I. Quality planning To ensure a more positive outcome of the project, the project team will undertake good planning process. The goal of this project is to develop more technologically advanced laundry equipment for the company. This will increase the effective capacity of the laundry facility from the current 60% to the required 80%. The project team will plan on how to purchase the new facility, how to integrate it in the new system, the relevant personnel to handle the new facility and the measures taken to ensure effective operation of the new plant. II. Quality assurance The project management team will use quality assurance test to determine whether the project’s plan is headed to the right direction and the project’s objectives is on course. As for the measurement of project’s quality and customer’s satisfaction, qualitative and quantitative tests are of great necessity. In addition, these tests will be necessary in forecasting and authenticating the achievements of goals and identify need for counteractive actions. III. Quality control This comprisesof operational systems that are implemented to help the project attain the required standard quality. Basically, application of quality controls comes after the identification of the problem. Quality control for this project is important because it will help in monitoring specific project outputs and regulatesacquiescence with pertinent standards. In addition, during this stage the project management team will have the opportunity to identify relevant risks, mitigation measures and how to eradicatesubstandard performance. Risk management The project management team will use the Risk Breakdown Structure (RBS) to determine the risk breakdown faced by the project during the risk identification phase. RBS creates a more organized list of risks to assist in their comprehension and interpretation. Below is the process of managing risk Identify risks Evaluate and measure risks Analyze risk treatment alternative i.e. prevention or mitigation Assign risk Select control instruments Evaluation of the performance of measure developed A plan is developed for each of the risks. Once the plans are in place, the project team constantly monitors the situation to see if any of the risk came true. Communication strategy A good project communication plan ensures an effective communications throughout the life of the project. The project manager spends 80% of his time communicating; therefore for efficient project, there should be a good communication plan. A communication management plan is developed for this project. Communication strategy includes a communication matrix which maps the communication requirements for this project. This project maintains a strong internal communications network through ensuring that all lines of communication between all project functions be open. In addition, there is a strong communication and coordination internally through standardized reporting requirements and construction of a central reporting office. Communication expenses are included in the contingency section within the budget. Communication activities occur in accordance with the frequencies detailed in the communication matrix so as to ensure the project adheres to schedule constraints. References BERKUN, S. (2008). Making Things Happen Mastering Project Management. Sebastopol, O'Reilly Media, Inc. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=443245. PROJECT MANAGEMENT INSTITUTE. (2013). A guide to the project management body of knowledge (PMBOK guide). TONNQUIST, B. (2009). Project management: a complete guide. Aarhus, Academica. Read More